SHORT SALE MARKET EVOLUTION - GMAC SOLUTION TO FALSE BUYERS

I think it is a good idea because it doesn't obligate the buyers to anything until the bank approves the short sale so they are free to walk up until that point and even during the 14 days for their inspection period which I think is plenty of time in this market where inspectors are deperate for work.  It still doesn't prevent buyers from making offers on multiple short sale properties and they should be allowed to do this because they shouldn't have to wait months to get an answer from a short sale bank only to find out the answer is "No."

To the comments that agents feel it is unfair to the sellers that the bank gets the good faith money and not them, keep in mind that in a short sale the seller is not allowed to walk away with any proceeds so why would they be allowed to keep a buyer's good faith deposit?  They are often not paying their mortgage any way so it may even encourage sellers to sabotage deals by preventing inspectors from performing inspections, delaying closing, or not vacating the property in a timely manner to allow the buyers to close and move in.

I think anything to help more short sales close and streamline the short sale process is good and absolutely necessary in this market.

Part of the problem is Agents going out and mass Offering for their buyer. I have talked to several Realtors that say "oh my buyer has 7 offers out on other properties" We will just see which one gets accepted first. Nice theory but does not cut it. Many of the Realtors that do this only find that when the offer is actually accepted the buyer panics and walks anyway. It's all about training and educating the buyer and seller. 

"Earnest becoms non refundable 14 days after approvals are issued"  This is no news.  It takes 45 days on average to get an approval, and that gives the buyers plenty of time to get their other contingencies handled.  For those buyers who wait until the bank approves the short sale to begin their mortgage application...I say, too bad! This is one of the factors that causes short sales to fail: Buyers wait (usually on the advice of an uneducated agent or attorney) to get everything done after benk approval.  NO PEOPLE!  This should be done before! What this will do is kick out contracts from yahoos and non comitted buyers.  These contracts that will never close (70% of contracts on dealsaccording to BOA) are what clogs up the lenders systems and slow the process for everyone.

Reading through the comments on this blog and I was wondering if the GMAC policy was still holding strong, since this blog was posted 2 months ago?

Interesting...although I can surely understand the logic behind whatever GMAC is asking. It appears that they're trying to circumvent some state collection laws in order to squeeze money from a distressed seller. Does the Security deed contain language to this effect??? It is my understanding that whenever a seller is in default, then the lender has the right to force a sale through foreclosure. Some states recognize redemptions laws....some don't. Again, have they forgotten state laws regarding collections. In the event that the buyer walks after an approval has been submitted (which is absolutely ludicrious to me, by the way), then maybe the lender can amend the ss approval advising that the seller has make a contribution by way of the EM funds at closing. I don't see how they can legally request the EM deposit PRIOR to a foreclosure - especially when they're not a party to the contract. Remember, it's still the Seller's property....that's just my 2 cents. I could be wrong.

By the way, I'm not an attorney....I just play one on television.

Interesting...although I can surely understand the logic behind whatever GMAC is asking. It appears that they're trying to circumvent some state collection laws in order to squeeze money from a distressed seller. Does the Security deed contain language to this effect??? It is my understanding that whenever a seller is in default, then the lender has the right to force a sale through foreclosure. Some states recognize redemptions laws....some don't. Again, have they forgotten state laws regarding collections. In the event that the buyer walks after an approval has been submitted (which is absolutely ludicrious to me, by the way), then maybe the lender can amend the ss approval advising that the seller has make a contribution by way of the EM funds at closing. I don't see how they can legally request the EM deposit PRIOR to a foreclosure - especially when they're not a party to the contract. Remember, it's still the Seller's property....that's just my 2 cents. I could be wrong.

By the way, I'm not an attorney....I just play one on television.

it is total BS and merely another negotiating point....ANYTHING, and I mean ANYTHING AND EVERYTHING on a short sale is negotiable.....if your buyer or seller takes issue with ANYTHING on a short sale, escalate your file, or contact the Servicers legal department.

BEST MOVE -- Contact the Investor on the note directly...this works 99% of the time for ANY AND ALL ISSUES...circumvent the Servicers (who your client writes his or her check to each month), and short sales GET DONE!!!

We have been successfully negotiatng short sales for agents for almost 5 years now.  If you know the tricks of the trade your short sale goes to closing, if you do NOT know the tricks of the trade, your client loses his home, blames you, and, worst of all, you make no money for dealing with all the "fun"....

All my best to everyone on the short sale battlefield.

Sincerely, Ben Benita Short Sale Negotiations Expert, Speaker, Radio Guest

Author - "Are You More Likely To See Bigfoot Or A Short Sale APproval Leter?"

get it NOW on Amazon under "books" and "short sale Bigfoot" to get your short sales CLOSED!!!!

BBenita@Comcast.net

The false buyer isn't so much a problem as home buyers that offers on mulitple properties, and will take the one that comes through first with the most favorable terms.  they should also take into consideration that the biggest reason people walk is that it is taking too long, and many times their financing will expire.

It's a shame that the rules just keep changing. After working with Short Sales for the past few years, there isn't anything that suprises me. I just hope that when the dust settles they can't come back to us for their chnaged policies. I know how much patience these take, Hang in there.

So many discoveries can occur during an inspection period: structural or repair issues, crime statistic discoveries, traffic noise concerns, school district problems, etc, etc

Hi Richard

You sound like an attorney.

Short sales are complicated, with lots of ramifications from different places (IRS, lawsuits, defficiency judgements) well into the future.

An attorney's "bent" (looking for serious problems and heading them off or avoiding them) is needed here more than ever

Phil

One of the solutions to this kind of behavior by a servicer is to look up and notify the actual investor on the loan. The investors have no idea what the servicers are doing and how it's costing them money.

Additionally, the servicers like GMAC are rated by Moody's specifically for their loan servicing departments. If you do a lot of short sales, take the time to look up the Moody's rater specifically (it's one person) and contact him directly about it. Explain to him how more and more Realtors are skipping GMAC serviced short sales, costing the investors big money. If ratings drop, loan investors shift the servicing to another company.

Then again, you could just explain to your buyer that GMAC is impossible to deal with, there are too many other good buys out there, and go find something else.

The fact is, the banks will say and "demand" all kinds of things. With short sales, one of the keys is to just not take "NO" for an answer. I've written about this on my blog at http://www.dentonshortsaleblog.com/?p=130  Hope this is helpful to someone.

Mike Personius, Broker